Friday, July 14, 2017

The final stage of a bull market is euphoria - when everyone's accounts are going and people are investing as much as they can (and more) into the stock market. I am very sensitive to the stage of euphoria since I retired in 07 and planned on the market going up for another 10 years. Instead the market crashed the next year. Having survive a big downturn in our first year of retirement and clawing back the over 10 years has made me exceptionally cautious.

Here are the signs of euphoria that I am watching for:

Everyone is talking about the stock market. Not. All my spouses relatives, who were all made money as speculators in the dotcom boom, have no interest in stocks anymore. At a neighborhood cookout, I couldn't even get people who are in the business to have any interest in talking about stocks. The only hint I have is a neighbor telling me she has been "watching" NVDA.

All stocks are rising. Not. There are still a large number of stocks declining and many stocks that have fallen previously are still near their 52 week low.

There are no more bears. Not. I still see a number of bears and significant bearish sentiment. I know one person that has sold all his equities and has invested in a 2X bear fund. When there are no more bears, it's a sure sign that euphoria is near or happening.

FOMO - Fear Of Missing Out. Maybe. People start chasing high flying stocks assuming the stock price will go higher. Stocks advance in the double digits on a frequent basis due to buyers chasing the stock. A few stocks have advanced significantly this year and those are being chased, but not the majority of stocks.

As I see it, euphoria may be coming, but it's not here yet. So I will continue to maintain our investments and taking some profits by trimming positions as the market keeps advancing.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

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About Me

My wealth goal is to create a guaranteed yearly income stream equal to my highest salary for my retirement years. While I have developed a strategy to do this,
I am interested how others are thinking of achieving financial security for retirement.
This blog is a summary of facts, ideas, discussions, and action plans to achieve that goal.

Disclaimer

This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.

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Disclaimer:
This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results
based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.